Best Buy Co. Inc. (NYSE: BBY) cannot afford to fall further behind Amazon.com Inc. (NASDAQ: AMZN) in the consumer electronics retail business, although history says holding its market share is not possible against the e-commerce juggernaut. However, as a means to pull in consumers, Best Buy has discounted the Apple Watch by $100.
Best Buy offers the watch at $599, down from its normal retail price of $699. The specific version is the one with a 42mm stainless steel case and the Milanese Loop. Customers get free shipping, in a holiday world in which free shipping is a staple.
The move may not help Best Buy much because of evidence that Apple Watch sales have been poor since the product was launched on April 7. According to research company Canalys, Apple Watch sales were 4.2 million in the second quarter. Most Wall Street Apple Inc. (NASDAQ: AAPL) watchers have been disappointed by these numbers. Some even claim Apple Watch sales will not pick up unless a second version has more features, and perhaps a longer battery life.
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The results of Best Buy’s most recent quarter, which ended October 31, were disappointing. Revenue dropped from $9.03 billion to $8.82 billion. Net income was tiny at $125 million. Guidance disappointed Wall Street. Best Buy shares have dropped 12% in the past month and at $29.77 are near a 52-week low.
Apple product discounts are front and center on the Best Buy’s website. Apple products are among the most admired and widely sold consumer electronics products in the world, so the Best Buy tactic makes sense.
Best Buy needs to rebuild its sales, particularly online, product by product and price by price. For the time being, at the lead of that effort, the formula is Apple Watch by Apple Watch.
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